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NAFTA Realities and FTAA Dangers
by Katie Quan, Director
John F. Henning Center for International Labor Relations
Center for Labor Research and Education- Institute of Industrial
Relations
University of California, Berkeley
kquan@uclink4.berkeley.edu
Understanding the real NAFTA
In the mid-90s when labor activists were opposing
NAFTA, we were concerned that the elimination of tariffs and
other trade barriers would lead to an acceleration of the
"race to the bottom." We suspected that corporations
would rush to take advantage of cheaper labor in Mexico and
move production there. In the garment industry, we were already
familiar with the sweatshops that globalization had produced,
even with tariffs and quotas in place, and we believed that
free trade simply meant that this globalization would take
place at a faster rate. At that time I was head of the garment
workers' union in the Pacific Northwest, and I remember publicly
saying that the passage of NAFTA would be like "hammering
the final nails on the coffin" of our industry and our
jobs in the U.S.
The year after NAFTA passed, I sat across
the bargaining table from Koret of California, a major union
employer, who told my members and me that NAFTA was the single
biggest boon to the company that it had ever seen. NAFTA allowed
the company to import fabric from China into Mexico (tariff-free),
stitch the clothing in Mexico (lower labor costs), and then
bring those finished garments into the U.S. (tariff-free).
With such favorable conditions, it is no wonder that Koret,
Levi Strauss, and hundreds of other manufacturers have laid
off thousands of garment workers and shifted production to
Mexico. Today, the U.S. Department of Labor estimates that
the rate of apparel employment in the San Francisco Bay Area
has dropped 50% from October 1999 to April 2001, which follows
a 40% drop during the prior 18 months.1
What we hadn't anticipated was that NAFTA
was much more than the acceleration of the race to the bottom.
In fact it was the threshold of a major consolidation of power
by multinational corporations, who through this free trade
agreement gained the legal right to promote their business
advantage over laws to protect public citizenry.
Take the case of MTBE as an example. MTBE
is a chemical that is used as an additive in gasoline and
is suspected of causing cancer. The State of California banned
its use after finding that it had not only been shown to have
medical dangers, but that it had also poisoned precious water
resources, including Lake Tahoe. The Methanex Corporation
of Vancouver, British Columbia, who manufactures MTBE, not
content with being banned from a lucrative market, sued the
State of California for $970 million in "anticipated
lost profits." Their claim is that the state's ban interferes
with Methanex's ability to compete fairly, and their lawsut
is based upon Chapter 11 of NAFTA, which provides for the
elimination of barriers to fair competition.2
Another example is United Parcel Service's (UPS) current $230
million lawsuit against the Canadian government. UPS suit
is claiming that the Canadian government's subsidization of
its postal system puts UPS in an unfair competitive position,
and thus it is suing for losses that are not only actual,
but also potential losses. Moreover, under the rules established
by NAFTA, UPS believes that it can pick and choose which Canadian
postal markets to compete in. This means that it could possibly
take over service in profitable urban markets, while leaving
rural and Arctic Canadian markets without any postal service.3
These two examples show relatively unknown
aspects of the real meaning of NAFTA. This trade agreement
is not simply a provision for trade without barriers. It is
a stunningly aggressive attempt by private corporations to
dismantle basic services that governments provide to its citizenry,
as well as to eliminate laws within countries that protect
core social values and human rights, in the name of "fair
competition" and "free trade."
FTAA will be qualitatively worse than NAFTA
FTAA is often described as an extension of
NAFTA to the tip of South America, but in reality it is much
more than that. While the proposal is indeed to extend free
trade to all countries of the Americas except for Cuba, its
more fundamental impact will be its targeting of public services
for privatization and deregulation.
Most people think of trade as the flow of
commodities. However, as a percentage of the gross national
product, commodities rank relatively low. What ranks as a
high percentage is public services, which altogether comprise
70% of the U.S. GNP. This includes water services that, on
a global scale, are a $1 trillion-a-year industry, education
a $2 trillion industry, and healthcare a $ 3.5 trillion industry.4
For investors, this is the next lucrative frontier, and their
tool will be Chapter 11-type provisions that allow them to
sue governments for "unfair" subsidies to these
sectors and then take them over.
In this context, it is not far-fetched to think that a U.S.
private health insurance company or a health maintenance organization
might sue the Canadian government for unfair advantage, because
of its subsidizes its national health care system. FTAA could
literally make public services a thing of the past. All of
the public institutions we have created, and all of the protective
regulations that we value, could be challenged by rapacious
corporate investors. Thus, whereas formerly it was primarily
workers in the manufacturing sector who felt the direct impact
of free trade, now it will also be public sector workers,
and everyone who relies on public services such as water,
education, health, and postal services, who will also be directly
affected by FTAA.
The Need for More Effective Strategies
During the past several years, labor and citizens
groups have coalesced around opposition to free trade agreements
from NAFTA to the Multi-lateral Agreement on Investment (MAI)
to the World Trade Organization (WTO) to FTAA. While some
activists have called for the outright elimination of these
agreements and institutions, unions and most activists have
generally demanded reform of trade agreements through the
inclusion of labor and environmental standards and a role
for labor's voice in trade negotiations.5
These demands, delivered through massive grassroots
organizing, have undoubtedly had a slowing effect on governments
rushing to consolidate free trade, as in refusal of the U.S.
Congress to grant FastTrack authority to President Clinton
in1997, the defeat of the MAI in 1998, and the curtailment
of WTO deliberations in 1999. Nevertheless, the peoples of
the world continue to face a mounting barrage of free trade
initiatives, each more threatening than the last.
Under these conditions, policies that oppose
free trade and call for "fair trade" in the form
of labor and environmental standards may not be adequate.
Whereas private corporate investors have gained new rights
to dismantle laws that protect the public and their resources,
a countervailing set of democratic rights may be necessary--ones
that protect democratic institutions from private corporate
greed. An example of these democratic rights can be found
in the founding principles of the Hemispheric Social Alliance.6
Additionally, unions and non-governmental
organizations have the potential for playing a much greater
role in educating the public about FTAA and jointly strategizing
about raising their voices to a higher pitch in the trade
debate. Now that it is clear that this is not just an issue
for manufacturing sector workers, but for all working families,
the challenge will be to broaden, deepen, and strengthen the
work that has already begun.
1 Interview with George Wedemeyer, U.S. Department
of Labor, April 25, 2001 by Katie Quan.
2 "Canadian firm fights California ban on chemical; NAFTA
invoked on gasoline additive," The Washington Times,
April 29, 2001, Part A; pg. A2.
3 "UPS seeks $230M from post office: Canada Post enjoys
unfair advantage, parcel deliverer tells NAFTA" The Ottawa
Citizen, April 25, 2000. Phil Milford.
4 Barlow, Maude, The Free Trade Area of the Americas: Threat
to Social Programs, Environmental Sustainability and Social
Justice. International Forum on Globalization, February, 2001
5 See Russell, Bernie, Fighting for Workers' Human Rights
in the Global Economy. Brussels: International Confederation
of Free Trade Unions. 1998.
6 http://www.slc.edu/~baja/Alternatives.html#General Principles
Official Agencies
Free Trade
Area of the Americas
Government
of Canada FTAA Page
United
States Trade Representative
World Trade Organization
World Trade Organization - GATT
Website
North American Unions and Labor Organizations
AFL-CIO
Bakery,
Confectionery and Tobacco Workers & Grain Millers International
Union (BCTGM)
Canadian
Auto Workers (CAW-Canada)
Canadian
Labor Congress
Canadian
Union of Public Employees
Canadian
Union of Postal Workers (CUPW)
Canadian
Union of Public Employees (CUPE)
Council of Canadians
International
Association of Machinists and Aerospace Workers (IAM)
International
Brotherhood of Teamsters (IBT)
Teamsters
Canada (TC)
International
Longshore and Warehouse Union (ILWU)
Jobs With Justice
National Farmers
Union (Canada)
National
Union of Public & General Employees (NUPGE)
Paperworkers
Union of Canada (CEP)
United
Auto Workers (UAW)
United
Steelworkers of America (USWA)
South American Unions and Labor Organizations
ICFTU
Inter-American Regional Organisation of Workers (ORIT)
Alianza Social Continental
(ASC)
Central Ùnica dos
Trabalhadores (Brasil)
Chile Sustentable
Confederación de Trabajadores de la Educación
de la República Argentina
Instituto para el Desarrollo de la Micro y Pequeña
Empresa (Argentina)
Fundación Solón
(Bolivia)
FOCO (Argentina)
Instituto de Ecología Política (Chile)
Latinoamerica
de Organizaciones del Campo
Red de Ecología Social (REDES)/Amigos de la Tierra
Uruguay
Red Mexicana de Acción Frente al Libre Comercio (Mexico)
Third World Network/Instituto del Tercer Mundo (Uruguay)
World Social Forum/Fórum Social Mundial (Brasil)
Non-profit Organizations and Research Institutes
Action for
Community and Ecology in the Regions of Central America
Alliance for Responsible
Trade
Alternatives
for the Americas
Common Frontiers
Development GAP
Economic Policy Institute
Friends of the Earth
Global Exchange
Global Trade Watch
Hemispheric Social Alliance
Institute for Policy Studies
International Forum on Globalization
National Network of Immigrant and Refugee Rights
Opération Québec
Printemps 2001
Polaris Institute
Public Citizen
Resource Center of the Americas
Stop the FTAA
The Development Group for Alternative Policies
Women's
Edge
WTO Watch
Position Papers and Background Materials on FTAA
The
Free Trade Area of the Americas and the Threat to Social Programs,
Environmental Sustainability and Social Justice in Canada
and the Americas
by Maude Barlow of The Council of Canadians (also in Español,
Français, and Português)
NAFTA
Investor Rights Plus: An Analysis of the Draft Investment
Chapter
of the FTAA
a report by Canadian Center for Policy Alternatives (PDF)
The
FTAA after Quebec: What happened? What's next?
by Marc Lee of the Canadian Center for Policy Alternatives
(PDF)
Inside the Fortress: What's going on at the FTAA negotiations
a detailed briefing paper by Marc Lee of the Candian Centre
for Policy Alternatives (PDF)
A Ten Point Justice Agenda for the Americas
ten things that are wrong with the FTAA--and how to fix
them
by John Dillon
A
Sector Analysis of the FTAA
by the Alliance for Responsible Trade
A
Hemisphere for Sale: The Epidemic of Unfair Trade in the Americas
a report by the Witness for Peace (PDF)
Alternatives
for the Americas: Building a People's Hemispheric Agreement
by the Hemispheric Social Alliance
America's
Plan for the Americas
a 28-page analysis of the US Government's negotiating
positions on the FTAA
by the Alliance for Resposible Trade (PDF)
Comments
of Public Citizen on Trade Matters Related to the Free Trade
Area of the Americas
by Public Citizen's Global Trade Watch
"U.S
Foreign Policy In Focus: The Free Trade Area of the Americas"
by Karen Hansen-Kuhn, The Development GAP
"Freedom's
That Are Abolished"
a Green Paper from the Action for Community and Ecology in
the Regions of Central America
"Free Trade Area of the Americas: Demystifying
the Corporate Jargon," a pocket booklet.
E-mail: Alliance for Global
Justice
Free
Trade Area of the Americas booklet
24 pages of economic ABC's and cartoons from Dollars &
Sense Magazine
The
FTAA and the AIDS Crisis in the Global South
by Act-up Philidephia and the Global Access Project
The
Last Frontier
an analysis of the GATS agreement by Maude Barlow
Ten
Reasons to Oppose the FTAA
by Global Exchange
NAFTA
for the Americas: Q&A on the Free Trade Agreement of the Americas
by the Multinational Monitor
Training Materials on FTAA
TRADE SECRETS: The Hidden Costs of the FTAA
A short documentary about globalization and the Free Trade
Area of the Americas
2002
By Jeremy Blasi and Casey Peek
Common
Frontiers-Canada
Free Trade Action Kit: 11 popular education pieces in English
and French, targeted at Canadians.
FTAA Presentation Outline. Contact the AFL-CIO
Education Department at (202) 637-5188
FTAA Action Packet: Prepares activists to
speak on the FTAA.
E-mail: Action for Community
and Ecology in the Regions of Central America
FTAA for Beginners: Describes the FTAA and
how it fits into the global economy. Includes case studies
and handouts. Updated after Quebec. $25 for trainer's guide
and handouts + $25 for 2-x-3 flipchart, postpaid.
E-mail: United for a Fair
Economy or Call: (617) 423-2148 x 24
Jobs with Justice
FTAA Labor Kit: 15 or 30 minute presentation on the FTAA.
Call: (202) 434-1106 or see
FTAA "Campaign of Inquiry" Packet:
Background on the campaign demanding the release of the FTAA
text and related documents from.
E-mail: Public Citizen
Popular Education Workshops on Corporate-centered
Globalization: uses the US-Mexico relationship as a "laboratory
for globalization."
Contact the Mexico Solidarity Network (202) 434-1106
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